The high-count yarn market continues to weaken, with prices for 60S and above grades declining steadily. However, upstream long-staple cotton has followed a completely different price trajectory. In early July, spot prices for Xinjiang long-staple cotton not only held firm but some mills even narrowed discounts for regular customers, intensifying the standoff between buyers and sellers.
Price Firmness Amid Supply-Demand Mismatch
Public market data shows that on July 8-9, the fixed price for 2024/25 grade 236/335/336 long-staple cotton at Bazhou warehouses in southern Xinjiang remained stable at RMB 26,720-26,920 per ton (including one month of truck loading fees). At Aksu warehouses, 2025/26 grade 336 long-staple cotton was quoted at RMB 28,220 per ton (including warehousing and title transfer fees), showing minimal adjustment from late June.
This price performance stands in sharp contrast to the weak high-count yarn market. During the off-season amid weak end-user demand, yarn mills have seen inventories pile up and prices fall, which theoretically should pull down raw material costs. But long-staple cotton suppliers have not followed suit, due to structural tightening on the supply side.
Trader Hoarding vs. Mill Lean Inventory
On the supply side, inventories at major cotton merchants have notably declined. One large trader revealed it has only 11 batches of 2025/26 machine-picked long-staple cotton left, stored in an Aksu supervised warehouse with breaking strength of 39-41 CN/TEX. The trader is in no rush to sell and prefers bulk deals with large mills, showing little interest in small-lot purchases.
Meanwhile, mills have adopted the opposite procurement strategy. Several large mills in Shandong, Jiangsu, and Henan report that inland warehouse stocks of long-staple cotton are concentrated in Zibo, Weifang, and Jiangyin, with overall inventory levels low. Due to uncertain end-user orders, mills are maintaining rigid demand procurement and lean inventory operations.
To accommodate this reality, some traders have made concessions—allowing half-lot withdrawals, where contracts are signed for full lots but payment is made per withdrawal. Even so, the long-staple cotton market remains tepid, with transaction volumes unable to expand significantly.
U.S. Pima Expansion Does Not Change Domestic Supply
An international variable also deserves attention. The USDA forecasts 2026/27 U.S. Pima cotton planted area at 150,000 acres, up 6% year-on-year. This is a significant upward revision from the March planting intentions report of 130,000 acres (down 8.1%), indicating improved grower sentiment.
However, this incremental supply has limited near-term impact on the domestic long-staple market. While U.S. Pima and Xinjiang long-staple cotton overlap in fiber length and strength indicators, downstream customers have established usage habits and procurement channels. Moreover, domestic stocks are concentrated among a few traders with superior quality, giving sellers relatively strong bargaining power.
When Will the Stalemate Break? Watch High-Count Yarn Destocking
The core contradiction in the long-staple cotton market is: supply is concentrated with quality inventory and sellers are hoarding, while demand is cautious with mills replenishing only as needed. This pattern is unlikely to break soon unless the high-count yarn market sees a clear recovery or mill inventories are depleted to a critical replenishment point.
Looking at seasonality, August-September is typically the preparation period for autumn/winter high-density fabrics. If end-user orders recover, higher mill utilization will directly boost long-staple cotton procurement. Conversely, if the off-season extends into September, rising carrying costs for traders may force them to relax sales terms, potentially leading to price weakness.